Memorial Hospital-The Woodlands v. McCown

• Decision Date: 12 July 1996
• Docket Number: HOSPITAL-THE,Nos. 95-0316,95-0340,s. 95-0316
• Citation: 927 S.W.2d 1,39 Tex.Sup.Ct.J. 1021
• Parties: 39 Tex. Sup. Ct. J. 1021 MEMORIALWOODLANDS, Relator, v. The Honorable F. Scott McCOWN, Judge, Respondent. BROWNWOOD REGIONAL MEDICAL CENTER, HTI Doctors Hospital, and Medical Center Hospital, Relators, v. The Honorable F. Scott McCOWN, Judge, Respondent.
• Court: Texas Supreme Court

Page 1

927 S.W.2d 1

39 Tex. Sup. Ct. J. 1021

MEMORIAL HOSPITAL-THE WOODLANDS, Relator, v. The Honorable F. Scott McCOWN, Judge, Respondent.

BROWNWOOD REGIONAL MEDICAL CENTER, HTI Doctors Hospital, and Medical Center Hospital, Relators, v. The Honorable F. Scott McCOWN, Judge, Respondent.

Nos. 95-0316, 95-0340.

Supreme Court of Texas.

Argued Oct. 11, 1995.

Decided July 12, 1996.

Claude M. McQuarrie, III, Cyndi M. Jewell, Houston, Mary H. Greer, Austin, for Memorial Hospital-The Woodlands.

William J. Dunleavy, Frank Shor, Carrollton, for Brownwood Regional Medical Center, et al.

R. James George, Laura Lee Stapleton, Austin, Joseph G. Chumlea, David F. Bragg, Dallas, for McCown.

Justice OWEN delivered the opinion for a unanimous Court.

In these original proceedings, we must determine whether documents and files generated for and by a hospital credentialing committee in its investigation and review of a physician's initial application for staff privileges are protected from discovery. The trial court concluded that the documents at issue were discoverable, and the parties objecting to production requested mandamus relief from this Court. Because we conclude that the documents are protected from discovery under section 5.06 of Texas Revised Civil Statute article 4495b and section 161.032 of the Texas Health and Safety Code, we conditionally grant writs of mandamus.

I

In 1993, Dr. Bruce Leipzig sued CBS, Inc. and KTBC-TV, Inc. (collectively, "CBS") for libel and false light invasion of privacy after CBS aired a 48 Hours program containing a segment entitled "Bad Medicine." In the broadcast, CBS reported that Leipzig's staff privileges had been revoked by a hospital in Arkansas, that a complaint had been filed with the Arkansas Board of Medical Examiners seeking to revoke his license for gross negligence or malpractice, and that Leipzig had then moved to Texas, where he is practicing medicine today, instead of renewing his license in Arkansas.

In the course of Leipzig's defamation action, CBS served subpoenas duces tecum on several Texas hospitals at which Leipzig had previously practiced or sought staff privileges. The hospitals include Memorial Hospital--The Woodlands, Brownwood Regional Medical Center, HIT Doctors Hospital, and Medical Center Hospital (collectively, the "Hospitals"). The subpoenas requested the Hospitals to produce all documents in their administrative and credentialing files concerning Leipzig, including "nonprivileged" documents regarding Leipzig's application for staff privileges.

The Hospitals filed motions for protective orders, claiming that their files were privileged and exempt from discovery under sections 161.031 and 161.032 of the Texas Health and Safety Code and sections 5.06(g) and (j) of the Medical Practice Act, Texas Revised Civil Statute article 4495b. The Hospitals submitted the affidavits of their respective medical staff coordinators in support of the claimed privileges and tendered several categories of documents to the trial court for in camera inspection.

The trial court denied the Hospitals' motions for protective orders and ordered the documents produced. In a letter to the parties regarding its rulings, the trial court expressed its view that the documents at issue were privileged under section 5.06 of article 4495b, and were confidential under section 161.032 of the Health and Safety Code, but concluded that it was bound by decisions to the contrary from a court of appeals and a federal district court, citing McAllen Methodist Hospital v. Ramirez, 855 S.W.2d 195 (Tex.App.--Corpus Christi 1993, orig. proceeding); Family Medical Center, U.T. v. Ramirez, 855 S.W.2d 200 (Tex.App.--Corpus Christi 1993, orig. proceeding); and Manthe v. Vanbolden, 133 F.R.D. 497 (N.D.Tex.1991). The trial court stayed its rulings to allow the Hospitals an opportunity to seek mandamus relief, which was denied by the court of appeals.

In separate mandamus proceedings, the Hospitals now petition this Court. We consolidated the cases for oral argument along with two other original proceedings concerning the statutes at issue. We have issued a separate opinion today in the latter proceedings, Irving Healthcare System v. Brooks, 927 S.W.2d 12 (Tex.1996).

II

Generally speaking, statutes such as section 5.06 of the Medical Practice Act and sections 161.031-161.033 of the Texas Health and Safety Code are based on two premises: first, that exacting critical analysis of the competence and performance of physicians and other health-care providers by their peers will result in improved standards of medical care; and second, that an atmosphere of confidentiality is required for candid, uninhibited communication of such critical analysis within the medical profession. See Griffith & Parker, With Malice Toward None: The Metamorphosis of Statutory and Common Law Protections for Physicians and Hospitals in Negligent Credentialing Litigation, 22 TEX.TECH L.REV. 157, 158-59 (1991); Creech, Comment, The Medical Review Committee Privilege: A Jurisdictional Survey, 67 N.C.L.REV. 179, 179 (1988). Although they vary widely in scope, as of 1988, statutes to protect the work of medical review committees had been enacted in at least forty-six states. Creech, supra, 179-80.

All parties agree that the records of and communications to a medical peer review committee are generally privileged and confidential if they were generated in connection with a review of whether a physician already on staff should retain those privileges. The question before us is whether the exemptions from discovery and the confidentiality afforded by the Texas statutes at issue apply to the initial credentialing process. We conclude that they do.

With limited exceptions, it was the intent of the Legislature in enacting section 5.06 of article 4495b to protect from discovery in a suit for damages the reports and records received, maintained, or developed in connection with a physician's initial application for staff privileges. TEX.REV.CIV.STAT.ANN. art. 4495b, § 5.06(g), (j), (s)(3) (Vernon Supp.1996). The express provisions of section 5.06 of article 4495b make this clear, as does the context in which the present form of section 5.06 was enacted. When section 5.06 was amended in 1987 to include the provisions at issue, Acts 1987, 70th Leg., R.S., ch. 596, § 18, 1987 Tex.Gen.Laws 2333, there was a nationwide movement to disseminate information to peer review committees and state medical boards about physicians who have had adverse actions taken against them for their lack of professional competence. A comprehensive federal act, the Health Care Quality Improvement Act, was passed by Congress in 1986. 42 U.S.C. §§ 11101-52 (1994). Among other provisions, the federal Act not only encourages hospitals considering a physician's initial application for staff privileges to consult the national databank created under the Act, but also requires the hospital to do so. 42 U.S.C. § 11135(a)(1).

It is apparent from the federal Act that the initial credentialing process is a critical juncture in improving the quality of medical care and that peer review should occur at that point. See, e.g., 42 U.S.C. §§ 11101(1); 11151(1), (9), (10)(A). Article 4495b was enacted in this climate. Indeed, Texas chose to "opt in" to the federal Act's coverage at an early effective date. See article 4495b, § 5.06(a); see also 42 U.S.C. § 11111(c)(2)(A).

We further hold that the confidentiality provision of section 161.032 of the Texas Health and Safety Code extends to initial credentialing by medical committees.

We first consider article 4495b in greater detail.

III

A

Where a statute is unambiguous, a court must seek the intention of the Legislature as found in the plain and common meaning of the words and terms used. RepublicBank Dallas, N.A. v. Interkal, 691 S.W.2d 605, 607 (Tex.1985). The express provisions of the Medical Practice Act lead us to the conclusion that initial credentialing is within the scope of section 5.06. The opening declaration of the Medical Practice Act provides:

(1) the practice of medicine is a privilege and not a natural right of individuals and as a matter of policy it is considered necessary to protect the public interest through the specific formulation of this Act to regulate the granting of that privilege and its subsequent use and control.

Art. 4495b, § 1.02(1).

One of the Legislature's means of implementing this policy was to establish a reporting system and confidentiality requirements, as well as privileges from discovery in civil damage suits. The specific confidentiality provisions at issue state:

(g) Except as otherwise provided by this Act, all proceedings and records of a medical peer review committee are confidential, and all communications made to a medical peer review committee are privileged.

....

(j) Unless disclosure is required or authorized by law, records or determinations of or communications to a medical peer review committee are not subject to subpoena or discovery and are not admissible as evidence in any civil judicial or administrative proceeding without waiver of the privilege of confidentiality executed in writing by the committee.

Art. 4495b, § 5.06(g), (j) (emphasis added).

Another instructive provision is subsection (s)(3) of section 5.06:

(3) In no event may ... reports and records received, maintained, or developed by the board, by a medical peer review committee, or by a member of such a committee, or by a health-care entity be available for discovery or court subpoena or introduced into evidence in a medical professional liability suit arising out of the provision of or failure to provide medical or health-care services, or in any other action for damages.

Art. 4495b, § 5.06(s)(3).

Thus, subject to certain exceptions, all communications to a "medical peer review committee" are privileged and are not subject to discovery by virtue of the explicit wording of the statute. The question...